Assessing the Anticompetitive Effects of Multiproduct Pricing
AbstractIn response to the "standardless" approach used in LePage's v. 3M, the Antitrust Modernization Commission (AMC) and others advocate using a discount allocation approach to assess whether bundled loyalty discounts violate Section 2 of the Sherman Act. This approach treats loyalty discounts like predatory pricing. The analogy to predatory pricing is flawed. We propose an alternative approach that focuses on the presence of significant scale economies. We use our approach to analyze LePage's, as well as the recent PeaceHealth decision.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14199.
Date of creation: Jul 2008
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Find related papers by JEL classification:
- L4 - Industrial Organization - - Antitrust Issues and Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-07-30 (All new papers)
- NEP-COM-2008-07-30 (Industrial Competition)
- NEP-MKT-2008-07-30 (Marketing)
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- Alessandro Avenali & Anna D'Annunzio & Pierfrancesco Reverberi, 2011. "Bundling, Competition and Quality Investment: a Welfare Analysis," DIS Technical Reports 2011-02, Department of Computer, Control and Management Engineering, Università degli Studi di Roma "La Sapienza".
- Calzolari, Giacomo & Denicolò, Vincenzo, 2011. "On the anti-competitive effects of quantity discounts," International Journal of Industrial Organization, Elsevier, vol. 29(3), pages 337-341, May.
- Ken Heyer & Carl Shapiro & Jeffrey Wilder, 2009. "The Year in Review: Economics at the Antitrust Division, 2008–2009," Review of Industrial Organization, Springer, vol. 35(4), pages 349-367, December.
- Calzolari, Giacomo & Denicolò, Vincenzo, 2010. "Competitive quantity discounts," CEPR Discussion Papers 8144, C.E.P.R. Discussion Papers.
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